Apr 30, 201510:19 AMOpen Mic
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Economic Update: Looking for a rebound following 1Q weakness
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U.S. manufacturing data remained soft last week, leading market pundits to question whether the economy is really going to rebound from first quarter weakness.
A flash estimate of April manufacturing surveys indicate growth in activity slowed for the month. Durable goods orders, excluding the volatile transportation sector, slipped 0.2% in March, indicating further softness. The headline report was up 4%, due primarily to extremely strong aircraft orders, which were up more than 100% for defense-related aircraft and more than 30% for non-defense aircraft.
The slowdown in energy investment for the United States, as well as lingering effects from the West Coast port strike, may mean softer industrial activity lasts through April. In our view, the solid jobs market and soft inflation should lead to ramping consumer spending later this quarter, potentially heading to a rebound from what could be modest economic growth in the first quarter.